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George YeoMinister of Foreign Affairs, Singapore. Guest Columnist of BeyondSG. He is on Facebook. Readers are welcome to join his Facebook network at http://www.facebook.com/georgeyeopage

Harold FockEntrepreneur (Chief Editor of BeyondSG).
Deputy CEO/CFO of a listed technology company in Asia and CEO of Foundation Capital Pte Ltd, a hedge fund based in Singapore.

July 18, 2010

Speech by Minister George Yeo - "China's Re-Emergence on the Global Stage" at the FutureChina Global Forum

SPEECH BY MINISTER FOR FOREIGN AFFAIRS GEORGE YEO ON CHINA'S RE-EMERGENCE ON THE GLOBAL STAGE, THE FUTURE CHINA GLOBAL FORUM, 13 JULY 2010

In the last two days, we have discussed much about China’s internal developments and its external relations. I thought for my presentation today, we take a step back and set China in perspective. There are many people in the world who fear the rise of China; who wonder whether in this re-emergence of China on the global stage, they will see a China that is aggressive, imperialistic, dominant and domineering. In official speeches, fine words are used but in the inner councils and in the darker rooms, real concerns are expressed and sometimes the fears are acted upon. That is in the nature of human society.

Churchill once said that to see far into the future, we must look far back into the past. To try and discern China’s re-emergence in this century, it is important to see China in its earlier incarnations. For us in Southeast Asia, China is deep in the historical memory. Just last week, we had from Oman, a small dhow, a replica of an ancient dhow which sank 500 miles from Singapore during the Tang Dynasty, carrying 65,000 pieces of Chinese pottery from many kilns in China, principally Changsha but also from other places as well. And on the pieces of the pottery were Buddhist motifs and Islamic motifs, because that was also the age of Nalanda and the age of the Abbasids. Even then, it was a huge trade and it brought great prosperity to the region. During the Sung Dynasty, China was probably a large part of the global economy and the kingdoms in Southeast Asia and Southern India competed and fought each other over the China trade. And in one of those wars, a fleet from south India, the Cholas, defeated Srivijaya.

So when I say re-emergence, there is a particular meaning. Unusual for any other country, China has been able, over a wide geographical expanse, to reconstitute itself again and again. To my European friends, I tell them that it is like the Roman Empire after it was destroyed and broken up, reconstituting itself four, five times more till today. Of course, it never happened in Europe. And till today the nations of Europe have deep tribal loyalties. We see it during the World Cup, and it is expressed in their languages, in their food, in their wines and in their passions. China is unusual in that over 90% of its population consists of Han Chinese and there is a sense that they belong to a common race. The Americans, because of the exceptional nature of their conception, believe that it is good for everybody in the world to become American. It is good for you to be American, to have American values, then you would be better off and the world will be a better place. So there is a natural missionary spirit among Americans, and indeed which is expressed from time to time in American foreign policy. For the Han Chinese, it is different. The Han Chinese are a little like the Jews. If you are not born one, there is no need for you to become one. I mean yes, learn the language, understand the habits, enjoy the food, observe the niceties; but if one day a non-Chinese were to say, look I will become Chinese, everyone will feel a little awkward because if you are not born one, how can you be one? It is like those who convert to Judaism and proclaim themselves Jewish. In formal terms, they may be accepted but in deep emotional terms, that is a different story. And because of this, the Chinese attitude towards empire, which is really a western term, is very different from the empires created by Europe in the age of imperialism. For China it was the world inside which was decisive. If it coheres, if the waterways and irrigation canals are in good repair, if the grain can flow freely, the internal market explodes and becomes very prosperous, for which it requires central authority and a central bureaucracy. But when that breaks down, all hell breaks loose and it can go on for decades or centuries, and millions of people die when that happens.

For this reason, those who govern China are always preoccupied with its internal development. Very often, its foreign policy is really to secure an environment of stability so that it can concentrate on its internal development. All too often in its history, if foreign threats are not addressed, if foreign relations are not managed, then that becomes a domestic problem. And when domestic issues are not resolved, the country goes into difficulty. I do not think China is naturally aggressive for this reason. But of course, if you are Korean or Mongolian or Central Asian or Vietnamese, well, you will say from time to time we were invaded by China, maybe even incorporated into their empire, and I think that is a fair perspective. But if you look at it from the internal perspective of China - securing the border regions, its supply lines – it’s really defensive. And nothing perhaps expresses it more than the rebuilding of the Great Wall of China from [the time of Emperor] Qin Shi Huang（秦始皇）- even from before that during the Zhan Guo（战国）or Warring States period - again and again in its history, in order to protect the internal environment so that the country can be well-governed.

So when we look at China into the future, China will of course seek to influence developments in the border regions, and in this case the border regions include all of Southeast Asia. But its dominant objective is internal, not aggression for the sake of lebensraum, of migrating its people and turning others into subject populations. It is important to understand this psyche because that has created a political culture which makes it acceptable for China to be governed as one polity. And because of the fears that local officials will be captured by local populations, so from the time of the Ming Dynasty they had a rule that you cannot be a high official, cannot be a gao guan （高官）, within four hundred miles of the place of your birth. And the system has been recreated in the PRC - you cannot be a high official near where you were born because you cannot escape all the loyalties of family and mutual obligations. So today if you look at China, the provincial leaders, particularly the Party Secretary and the Governor, are almost always not from their own province. And each province is about the size of a major European country. Again I tell my European friends, it is as if by practice, by regulation, the Chancellor of Germany cannot be German, the French President cannot be French, and the British Prime Minister cannot be British. But in China, it is considered acceptable because this has been the system from a long time ago.

Does it mean, going into the future, that China will be able to progress on a straight line and without major hiccups, without major difficulty, become the greatest power on Earth, even though it may be self-contained, and determining the terms of interaction with the outside world. It will not be so simple because the challenges within China today are enormous, always going back to how to govern the country so that there is peace, so that there is development, so that their regions are in balance and there are the systems, records, the waterways, the roads, to redistribute.

The biggest issue in China today is urbanisation - urbanisation on a scale and at a speed never seen before in Chinese history. This is something new. It has always been a rural society in the past, and governing the country was really about making sure that the countryside was productive. Today China is 40% urban. During Mao, it was 20% urban. One day it will be like Taiwan, like Korea, it will be 80% - 90% urban. And this will create a whole new situation requiring a whole new set of skills. The Chinese Communist Party achieved power when Mao Zedong broke from the Bolsheviks by capturing power from the countryside, not from the urban proletariat. All the skills and instincts and techniques of the Communist Party are based on control of the countryside, of the peasantry. But now the cities are growing rapidly, creating a new situation: small families, very often one-child, the anonymity of city environments, everybody on handphones, instant messaging, on the Internet - and China has already has more internet users than any other country on earth - and growing social mobility.This is a challenge, not only for the Communist Party; this is a challenge for Confucianism itself. Because Confucianism, which is what has held Chinese society together from the time of the Han dynasty, requires a certain accepted set of hierarchical social relationships which is all dissolving now in the modern world into networks. So somehow, and we face that problem in Singapore too because we are three-quarters Chinese here, we need a new … what I call “Urban Confucianism”. And that will be a new challenge for Chinese society because upon that, the Communist Party will have to re-invent itself based upon these profound social changes. If China succeeds in doing this, I have no doubt it will once again be the biggest economy on earth and the greatest country on earth. But it is not going to be easy because it is a new situation. No one in the world really has a solution for it; everybody is grappling, we are grappling.

You notice in Asia, all the traditional political parties have come into trouble. We had the LDP in Japan, the KMT in Taiwan. In Korea it is never quite settled. In Thailand, the tension between Bangkok and the countryside. In Malaysia, UMNO which was rural-based, now becoming urban-based, becoming urbanised. In Indonesia, Golkar. In India, we had the Congress party.And all are now confronting urban populations which are not happy. It is almost as if the more you develop, the bigger urban populations become, the more disaffected they are with traditional government. And it is partly for this reason that in recent years, China has became quite fascinated with the Singapore experiment.

Compared to China, Singapore is like a bonsai; it is too small to be of general relevance but it has some genetic similarities. So from time to time, researchers and social scientists in China, they study Singapore and say: “Oh well, if it can work here, maybe it can work there.” We found in our interaction with China over the years that their interest in the Singapore experiment is episodic. From time to time when it confronts issues and it scours the world for solutions, it looks at what Singapore does. Sometimes it likes what it sees, sometimes it does not like what it sees. And then it draws and abstracts the relevant lessons. This of course puts Singapore in a rather interesting position vis-a-visChina.

The point I am making is that when people say China is going to dominate the world, they worry that China is not only going to become very strong economically, but that it will seek to subjugate others and force them to behave like Chinese. I do not think that will happen because that goes against the grain of Chinese history. Chinese statecraft over the years, mostly defensive in its fundamental objectives, has always been to treat foreigners as foreigners; making a clear distinction between what is within and what is outside; between nei（内）and wai（外）. And very elaborate methods to handle what is outside so that it is not a threat to what is inside. We see this again and again expressed in modern terms in present policies. So when it comes to WTO trade liberalisation, trade yes, this yes, that yes, but when it impinges upon core structures - the commanding heights of the state economy, cultural issues, I do not think China, whoever governs China, will ever allow the world outside to determine how the country is governed within. You take say, the recent quarrel with Google over how it should operate in China. The Chinese did not want it to become a big problem but Google on its own wanted to politicise it. Of course once you politicise it, then China has no choice but to stick to its fundamental principles. Google has since stepped down, and decided, let’s handle this in a pragmatic way, and China is prepared to handle it in a pragmatic way. That insofar as it does not impinge upon its core interests, they can be flexible. But if it does, well that is a separate matter.

So too for China’s financial institutions. In the 19th century within a short period after the Opium War, China lost control of its financial system. I remember one senior LDP politician telling me some years ago that the Japanese knew that the moment ships landed on Asia’s mainland, they would be inspected not by Asians but by Europeans. Japan knew that unless it quickly re-created itself, it too would suffer the fate of China. But unfortunately Japan thought the solution was to become a competing imperialism and that led to grief. For this reason, while China will benefit from the international financial system, while it will allow its own financial industry to be opened up, when it comes to core structures, it will never allow itself to lose its sense of autonomy -media, finance, cultural policy, strategic state industries.

In some way, this may go back to the nature of the Chinese language itself, its ideographic character. As a child, it’s easier to read Chinese characters than alphabetic words because the Chinese characters are pictures. So little children of two - three years old can recognise Chinese words but they cannot read alphabetic words As an adult, alphabetic words are more convenient. So it is a language which really makes it difficult for you to fully access as an adult. But if you are born into it, then it becomes a part of you naturally. Some scholars have described the Chinese character system as a digital system because it is not phonetic, so it does not alter over time - the same characters can be read today as they were a thousand years ago, two thousand years ago. Whereas if you look at alphabetic systems, that cannot be done.

If we look into the 21st century and ask ourselves, let us say China succeeds and it becomes strong and powerful and its influence radiates into a much wider region - what will the world be like? I think the world will not become a Pax Sinica because the world is too big for that. And China is too internally preoccupied, to really have aspirations towards creating a Pax Sinica. I mean, China is not interested in making the Myanmar people democratic, or in making Muslims Confucianist. China is quite prepared to accept the world in all its diversity, so long as “you” do not threaten “me” (China). But there has to be a certain structural stability, for that it is in the nature of political power. And it will be a multi-polar world. In our part of the world, in Asia, to simplify it, and it is of course an over-simplification, I think there will be three major poles. There will be China, there will be India, and there will be the US. It is this triangle and how they relate to one another, which really will decide the big issues of war and peace in this century. Sino-US relations have already been discussed, I believe MM talked about it last night, the US Ambassador (Jon Huntsman) was here, so I think there is no need for me to go over ground which is already familiar to you, and which some of you know more about than I do.

But I will like to talk a little about India because India in terms of size and in terms of the age of its civilisation is comparable to China. And the two countries, really the two civilisations, because of the high Himalayas and the great deserts of Central Asia, except for the border skirmish in 1962, [have] never fought each other. Yes, there were monks, there were traders - they communicated through Southeast Asia, both influencing the countries of Southeast Asia, but they never fought. There is a certain deep recognition of each other as an ancient people, and a certain respect. The Chinese have always seen India as a source of Buddhism, of Kung Fu, of knowledge about astronomy and mathematics. The Indians on their side of the Himalayas, have always known that beyond there was a great emperor who ruled a vast realm with a rich market. Culturally they are not close. In fact culturally, they are very different. But there is a certain mutual respect and now they have got to settle their borders, they have got to work through some of their difficulties. As it was during the 19th century, China is already India’s biggest trading partner and that trade is growing rapidly.

Few years ago, the mountain pass of Nathu La between the Siliguri corridor of India and Tibet, has been re-opened.When I was in Tibet last August, a local official whom I met, told me that the Gaoyuan Tielu（高原铁路-the high railroad) from Xining to Lhasa, would be extended to Shigatse. He said that we are actually very close to the Nathu La pass and if the Indian government would agree, we could just link up to the Indian railroad, and Calcutta will only be a few hundred kilometres away. And then all of us will have much easier access to the sea. When I tell it to the Indians, they looked at me, they are a little worried. While most Chinese today are not aware there was a war in 1962, most Indians remember it.It is deeply etched in their memory, a scar not completely healed. But I believe one day these problems will be resolved because there is no natural antipathy between them. The benefits of trade and exchange are overwhelming, and the borders will be open. There will be more connections, and each can benefit the other hugely.

For this reason, I and others have been deeply involved in this project to revive the ancient University of Nalanda, which in its heyday was the greatest university on earth. Hundreds of years, attracting at its peak, 10,000 students from Japan, Korea, China, Tibet, Central Asia, all of Southeast Asia, and which received for many years, the great Tang dynasty monks, Xuan Zang （玄奘）, Yi Jing (義淨)and others. And till today, the best records of that period was the account by Xuan Zang, the Da Tang Xi Yu Ji （大唐西域记）, the Great Tang Western Region History. That is still the best record of India during that period of history more than a thousand years ago. So we are hoping that by reviving this university and making it an international university, it can bring together Asians from all over, so that each will know that their forefathers had once upon a time, helped one another, live together in peace, with trade, with monks crossing borders. And if we can help recreate some of that in this century, the likelihood that we will be able to preserve that larger peace will be improved.

There are people who feel that maybe they can also use India to counterbalance China. To me, that is much too simplistic. Yes, India is the world's biggest democracy and that is often trotted out as an explanation why India and America are natural partners. For certain issues, yes, America and India are natural partners. For other issues like climate change, India and China are natural partners. I believe each will, in the end, calculate upon its own interests. India is too old, too wise, too spiritual, too worldly, to be anything but itself. Democracy is one layer, but there are many layers, going down many kilometres.

I think it was in the Upanishads, in the Hindu pantheon, they have 33 crore gods - 330 million gods and goddesses. It is a bit mind boggling, isn't it? But of course, the Indians also believe in one spiritual essence. Over the centuries, there is no aspect of the human condition which the Indians have not experienced, or thought about, or tried to explain. Its complex social structures, the persistence of caste and you need only to look at the classified ads for marriages in the Sunday newspapers to know how alive and well caste is, to know that India will always be India. India is not going to be made use of by anybody, except in its own self interest. For this reason, there will be three poles. And each will be deep, profound unto itself.

I do not believe America is in decline, the way many people write about. America is the new world. It created a new political culture, social structure, based upon free individuals joining it. It is a little like the internet protocol, TCP/IP. If you accept TCP/IP, you can join America. So you can be Chinese, you can be Jewish, you can be Indian, you can be Arab; you take your pledge, adhere to their laws, you are part of it. And because it is open-ended, it seeks to extend its reach to the world. But if you look at it from another perspective; the globalisation that we see today, is an American globalisation. The TCP/IP which is at the heart of American political culture is really the connections now which is hyperlinking Chinese, and Indians, and Europeans, and Latinos together in the world, enabling us to operate a common trading system, a common financial system.

China cannot provide that globalisation software because China will always be internally preoccupied and to the extent that it is interested in the world outside, it is so that its internal management can be improved, and always in self-defence. China is not interested to create a Pax Sinica, or to have its own version of the TCP/IP. Yes it has Confucius Institutes; it wants you to learn Chinese and so on, but like the Jews, if you are not born one, thank you very much. Whereas, with America, it is different. What will link China and India together? Not Chinese software, not Hindu software; it will be American software through American universities, through the English language, through Anglo-Saxon rules of trade, of financial standards. This is an interesting multipolar world we are entering; a China which is re-emerging powerfully, an India which is also growing but which will be a pole unto itself and an America which is not only a reality, but also a necessity. Thank you.